I.                  AVOIDING Ks
a.      Situations where Ks can be avoided:
                                                  i.     Mental illness
                                                ii.     Infancy (18 in NY)
                                               iii.     Intoxication
                                              iv.     Misrepresentation (fraud)
                                                v.     Duress
                                              vi.     Unconscionability
b.     Incapacity: (Capacity is determined at the time of making the agreement)
                                                  i.     Contracts entered into by the following persons will be voidable:
1.     Minors, Insane persons and intoxicated persons b/c they’re incapable of having the legal power to manifest assent or intend to be bound.
                                                ii.     Minors: the Ks of a minor are voidable at the option of the minor, although the minor may nevertheless enforce the K against the adult
1.     Exceptions: (1) a K for the sale of necessaries (Minors are always liable for the R value of necessaries such as food, clothing and shelter). (2) If the minor affirms/ratifies the K when he reaches majority.
2.     ***If a minor makes a contract then the minor may elect to void (voidable) unless it is a contract for necessaries = the minor may choose to disaffirm the contract but then he will have to provide restoration along with restitution.
3.     Determination of a necessary from Bowling v Sperry: minor bought car and then found out that there was a problem with the car. He said fuck it and returned the car the Δ does not want to give the money back.
a.      Issue: May a minor rescind a K for the purchase of a car which is not vital to his existence?
b.     Holding: YES! The fact that the minor damaged the car is no defense to the suit. The court said that even if the minor did break the car, he does not have to fix the break. However, he has to restore the car
4.     Restatement §14: If the infant disaffirms the K he has to return the consideration that he took from the other party. However, if the property is gone then the other party is without remedy in most states.
a.      Remedies: Restoration is required but not necessarily at the status quo, unless it is a necessary and they would have to pay restitution for a reasonable amount to make up for the value lost.
5.     Burden: is on the infant and the level is that the infant must show the birth certificate
6.     Emanuel:
                                               iii.     Mental Incapacity:
1.     A person is mentally incompetent if: Restatement §15
a.      (a) he is unable to understand in a R manner the nature and consequences of the transaction OR
b.     (b) he is unable to act in a R manner in relation to the transaction and the other party has reason to know of his condition
c.      If the contract is made on fair terms and the other party has no clue about the illness the power of avoidance under the above section terminates to the extent that the contract has been so performed in whole or in part or the circumstances have so changed that avoidance would be unjust.
2.     Burden:  The court presumes that every person is competent. The only way they can void a contract is proving their burden by clear and convincing evidence that they are not competent
3.     Tests for Incompetence:
a.      Cognitive Test: Cognitive Test: whether a person is capable of understanding in a reasonable manner and the nature of what they are doing and also the effect/consequences of the actions(does not matter whether the other party knows what is going on)
b.     Volitional Test: (determines whether a person can control her actions). Whether a party could control her acts AND the other party had reason to know of this, b/c if this she was deemed incompetent.
c.      The court can look at certain factors to determine competency:
                                                                                                                          i.     She had a physical condition
ke is material
                                                                                                                        ii.     Enforcement of the K pursuant to the erroneous bid will be unconscionable (UC)
                                                                                                                       iii.     The mistake didn’t result from negligence or violation of a legal duty
                                                                                                                      iv.     The party to whom the bid is submitted will not be prejudiced except by the loss of his bargain
                                                                                                                        v.     Prompt notice of error is given
b.     § 153 When Mistake of One Party Makes a Contract Voidable
                                                                                                                          i.     Where a mistake of one party at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable by him if he does not bear the risk of the mistake under the rule stated in § 154, and
1.     (a)  the effect of the mistake is such that enforcement of the contract would be unconscionable, or
2.     (b)  the other party had reason to know of the mistake or his fault caused the mistake.
The person who is going to bear the risk is the person who selects the mode of transmission picks, unless the receiver suspects that something is wrong and
